FOX News "FOX News Sunday with Chris Wallace" - Transcript

Interview

CHRIS WALLACE, ANCHOR: I'm Chris Wallace, and this is "Fox News Sunday." The state of our union, 2011. As President Obama prepares Tuesday's big speech, what are the Democrats' plans for getting people back to work? How will Republicans use their new clout in Congress to cut spending and to run government?

We'll sit down with two Senate leaders, the top Republican, Mitch McConnell, and the number two Democrat, Dick Durbin. McConnell and Durbin, only on "Fox News Sunday."

Then President Obama moves to the center and gets a bump in the poll. We'll ask our Sunday panel if this is the blueprint for his reelection.

And our "Power Player of the Week", a film legend lends his voice to the celebration of JFK's inaugural.

All right now, on "Fox News Sunday."

And hello again from FOX News in Washington.

President Obama's State of the Union speech Tuesday will not only lay out his agenda, it will help frame the political debate for the next two years. Joining us now with the Republican view of the state of the union is Senate GOP leader Mitch McConnell, and Senator, welcome back to "Fox News Sunday."

SENATE MINORITY LEADER MITCH MCCONNELL, R-KY.: Glad to be here, Chris.

WALLACE: The word from the White House is that in his State of the Union speech, the president will focus on jobs at a time when Republicans are talking mostly about the deficit and health care reform. In the latest Fox News Opinion Dynamics Poll, 45 percent say the economy and jobs should be the top priority, 17 percent say the deficit and government spending, and 14 percent say health care.

Question, I know you think that they're all related, but can the president frame this as he is focusing on the future and you guys are stuck in the past?

MCCONNELL: I don't -- I don't think that will work for him. I mean, in fact, these issues are all related and the excessive government spending of the last two years is one of the reasons the private sector is not doing any better than it is.

The president needs to pivot. He seems to be pivoting on virtually everything else, and I don't put him down for that. I mean, he obviously saw what happened in the November election and is trying to go on a different direction. He's quit bashing business and is now celebrating business.

Well, it's about time because the only way we're really going to get unemployment down and get out of this economic trough is through private sector growth and development. I think excessive government spending, running up debt, making us look like a Western European country is the wrong direction. That's the direction they took the first two years. The American, you know, public, as one pundit put it, issued a massive restraining order, and I don't think we're going to go in that direction any longer.

WALLACE: Well, let me ask you about that, because the White House says while the president will call for budget cuts, that he's also going to call for some new spending in areas like education and research and infrastructure. Will you support any of that?

MCCONNELL: Well, look, when you hear, with all due respect to our Democratic friends, any time they want to spend, they call it investment, so I think you will hear the president talk about investing a lot Tuesday night.

We've got a huge spending problem here. We've had over $1 trillion annual deficit each of the last two years. Our friends on the other side a couple of years ago passed a budget that will double the national debt in five and triple it in 10. I mean, most of us think, and most American -- of the American people think that we need to do something about this and start doing it now.

We'll take a look at his recommendations. We always do. But this is not a time to be looking at pumping up government spending in very many areas.

WALLACE: Well, I mean, let me ask you again, specifically, as he says, and you're exactly right, they're calling it investments, in education, in research, things like renewable energy, in infrastructure. How does that sound to you?

MCCONNELL: Well, I don't think anything ought to be off-limits for the effort to reduce spending. And I've said to my constituents over the last couple of weeks, as they brought up particular areas of interest, don't assume that we can tackle this without impacting something you like.

So I don't think we ought to start out with the notion that -- that a whole lot of areas in the budget are exempt from reducing spending, which is what we really need to do and do it quickly.

WALLACE: There's a lot of talk that the president has moved to the center, since the midterms. You say that he's pivoted, making the deal with you on extending the Bush tax cuts, naming a former banker, Bill Daley, as the chief of staff, calling for this week in the Wall Street Journal a review of all regulations. And the fact is that -- that you can see he's gotten a significant bump up in the polls.

You have a little smile on your face. Do you think he's moved to the center?

MCCONNELL: Well, he certainly has, rhetorically. I mean, the president obviously got the message from the November election. I think, you know, hiring Bill Daley, hiring the vice president, hiring Bruce Reed, this competitiveness appointment the other day of Jeff Immelt. All of this is an effort to -- to kind of retool the -- the image. Look, I think that's fine. He ran as a moderate. I'd like for him to govern as a moderate.

Now look, what we're going to find out beginning next week is how much of this he really means. For example, I'm told he's going to come out for lowering the corporate tax rate. We have the second highest corporate tax rate in the world right now. It's not competitive. It doesn't help us create American jobs in America.

To the extent he actually, Chris, wants to do some of these things, our answer is going to be yes. Trade -- trade agreements. He's talking about Korea. Well, what about Colombia and Panama? We need to do all three of them.

These are the kinds of things that will create private sector jobs in America.

WALLACE: So is this a trust but verify moment?

MCCONNELL: I think that's a good way to put it. I mean, I'm happy that the president's pivoting. We all know why. But it is kind of a trust but verify moment. Let's see if he's really willing to do it and, if he is, I think he'll find a lot of help among Republicans in Congress.

WALLACE: Let's talk about spending, because you and House Speaker Boehner have been talking about a Republican plan to cut spending back to 2008 levels, before the stimulus and all of the actions of the last two years. But this week, the Tea Party faction, including your own Senator Jim DeMint, said that's not enough, and they proposed a freeze to 2006 levels that would reduce our debt, they say, by $2.5 trillion over the next decade.

Do you support that, Senator?

MCCONNELL: Well, I think we ought to try to reduce spending as much as we possibly can and there are going to be a lot of different ideas as we work our way through the -- through the legislative process.

And, by the way, Chris, it's not just the short-term annual debt we're talking about here. I think we ought to be looking at our long- term unfunded liabilities to the entitlement programs, and of course they can only be tackled on a bipartisan basis. And we'll look to the president to see what we wants to do about our long-term problem as well as the annual deficits we've been running, which are completely unsustainable.

WALLACE: But -- but when you hear this Tea Party idea, $2.5 trillion over the -- the next decade, I mean, is there some spending cuts that are too much?

MCCONNELL: Look, there are 535 members of Congress, a whole lot of different ideas. What we are going to try to do is reduce domestic discretionary spending as much as we possibly can that will get a signature by the president. So I welcome all of these ideas, and we're going to have members who want to do more, who want to do less. That's the legislative process.

WALLACE: OK, let's talk about the other side of the aisle, because our next guest, Senator Durbin, says whatever cuts you make that you should wait until the country is clearly out of the recession, and Democrats also say that all these cut, even the level that you're talking about, back to 2008 levels, would gut areas like law enforcement, and education and medical help. NIH would have to be cut, Head Start, FBI agents laid off.

Your response to that and also Durbin saying you got to wait.

MCCONNELL: Well, if -- if government spending would have solved the problem, we'd have a rip roaring economy right now, with all due respect to my friend Dick Durbin and his allies. And that's what we've been doing the last two years, the stimulus bill, massive borrowing and spending in order to try to advance the economy.

I think there is scant to no evidence that the stimulus bill had any impact on the private sector. And look, everybody knows the only way we're going to get out of this economic trough is to get the private sector growing again.

WALLACE: Republicans talk about -- and I think this is all going to come to a head when the continuing resolution runs out on March 4, the government runs out of money and the question is where do you go from there? Do you -- would you accept a continuing resolution at that point, at current 2010 levels? Or are you going to say, right then, we need to see some significant spending cuts when the government runs out of money in early March?

MCCONNELL: Yes. I think there are two opportunities that we ought to take advantage of. One is the continuing resolution, and the other is the president, as you know, has asked us to raise the debt ceiling. Both of those opportunities, I think, should be taken advantage of, on a bipartisan basis, to do something significant about spending and about debt.

I don't think either one of them should just be passed, as we say in -- in Congress clean -- cleanly. They need to -- to carry along with them something really significant on spending and debt. That's what the American people are expecting. I think it's the right thing to do for the country.

WALLACE: I mean, implied in that is an "or else."

MCCONNELL: No. No, we're not -- you know, I think we ought to view this as an opportunity. Nobody's going to put a gun to anybody's head here. Let's take advantage of these two sort of seminal moments to do something really important about the biggest problem other than joblessness, and I think it's all related in that spending and debt.

WALLACE: But -- but the fact of the matter is you're going to have a view and it clearly is going to be more than the Democrats want. Are you willing to shut down the government over this? Are you willing not to -- to raise the debt limit?

MCCONNELL: Well, the only one talking about shutting down the government is in your question. I mean, what we're talking about here is trying to get some results. The American people would like for us to get some results on spending and debt, and both of these actually provide a good opportunity, Chris, because it kind of focuses your mind on -- on the biggest problem other than unemployment that we have in the country.

WALLACE: Would you agree that failing to raise the debt limit would be an economic disaster for this country?

MCCONNELL: Nobody is talking about that at this point.

WALLACE: Plenty of people are talking about that.

MCCONNELL: What we're talking about here is using that as an opportunity to do something significant about the issue raised by the president's request to raise the debt ceiling, which is we're spending too much.

(CROSSTALK)

MCCONNELL: So why not use that as an opportunity to carry along with it some significant spending reduction.

WALLACE: I'm going to ask you one more time. Not saying that you're threatening in any way not to raise the debt limit, but would you agree with Timothy Geithner that failing to raise the debt limit would be a disaster?

MCCONNELL: What I'm going to say one more time is we're going to use it as an opportunity to do something significant about spending and debt.

WALLACE: After the House voted to repeal healthcare reform, the Senate's Democratic Leader, Harry Reid, said don't worry, it's not even going to come up for a vote in the Senate. Here is what you said.

(BEGIN VIDEO CLIP)

MCCONNELL: The Democratic leadership in the Senate doesn't want a vote on this bill, but I assure you we will.

(END VIDEO CLIP)

WALLACE: With Republicans still in the minority, still in the minority in the Senate, how do you force a vote, number one? And number two, beyond that, how much do you think the Republicans can do in the Senate and the House to chip away at and defund healthcare reform over the next two years?

MCCONNELL: Well, first, I don't know why the Democrats don't want a vote on it. They're proud of it. They think it's one of the most important things that they've done for the country. In fact, only three House Democrats have voted for repeal last week.

So first of all, I'm a little perplexed they don't want to have this vote. But look, if they don't want to have the vote, we'll have the vote. I mean, I'm not going to discuss how we'll do it from a parliamentary point of view here, but it's very hard to (inaudible) votes in the Senate, and I assure you we'll have a vote on repeal.

If that does not pass, and I don't think anyone is optimistic that it will, we intend to go after this healthcare bill in every way that we can. It's the single worst piece of legislation that's been passed in my time in the Senate.

The American people get it. They understand here what has happened. And we need to try to repeal it overall, and then go back after it piece by piece and try to do what we can to keep it from being implemented.

WALLACE: How much do you think you can do to take apart, at least piece-by-piece, healthcare reform?

MCCONNELL: Well, I'll give you an example of something we've already done. The short-term continuing resolution we passed in December over until March took out funding for additional bureaucrats in both healthcare and the financial regulation bill that the president wanted to continue to ramp that up.

So we'll be looking at the funding. We'll be looking at getting rid of some of the absurdities like the 1099 requirement, anytime you do business that amounts to $600 with someone, you have to send a 1099 form to the IRS. Even the IRS says they don't know what to do with the paper. This is a 2,700-page monstrosity that is replete with problems, and we're going to go after as many on this as we possibly can.

WALLACE: Let's talk a little 2012 politics. This week two senators who vote with the Democrats, one, a full-fledged Democrat, Kent Conrad and independent Joe Lieberman announced they won't seek re-election, and in 2012, 23 Democratic seats are up, but only 10 Republicans. Aren't you in really good shape to take back the Senate in 2012?

MCCONNELL: Well, it's hard to predict what will happen in '12. Retirements happen every cycle. And I think there is a tendency to maybe read more into it than we should. We had six Republican retirements in the last Congress.

But I'm not going to predict what is going to happen in '12. We do like the odds. We think having 23 Democrats up and only 10 Republicans is certainly helpful.

WALLACE: You got some blow-back last fall when you said that our top priority ought to be to make Barack Obama a one-term president. And you explained, look, we don't like his agenda, we don't like the way he is taking the country, and the best way to stop that is to get him out of the White House. Would you agree when you see this bump in the polls and see his move to the center that he is less vulnerable now than he was at the time of the mid-term?

MCCONNELL: Well, the election is not right now. And the question is what are we going to do between now and '12? Sure, I'd like a Republican president in January of 2013, but the real question for the American people right now is not the election in '12, but what are we going to do now?

And I'm hoping the president's pivot to the center will be more than just rhetoric and we can actually do some important things for the country in the short term. The election will take care of itself over a period of two years.

WALLACE: Finally, are you going to sit with a Democrat at the State of the Union?

MCCONNELL: I'm going to sit where I usually sit. We don't have seating assignments for most of our members. They can sit anywhere they want to.

WALLACE: So you're going to sit at the leadership table on the Republican side of the aisle?

MCCONNELL: Well, it's a seat that I typically sit at. And if people want to mix it up, they certainly can. We don't have seating assignments for most of our members.

WALLACE: What do you think of this whole idea?

MCCONNELL: More important than the appearance of sitting together is what we do together. And the American people are more interested in actual accomplishments on a bipartisan basis here in the next six to nine months than they are with the seating arrangement at the State of the Union.

WALLACE: Senator McConnell, we want to thank you so much for coming in. I'm very glad the seating arrangement allowed you to come here this Sunday morning.

MCCONNELL: Glad to be here.

WALLACE: Thanks so much. Always a pleasure to talk with you, sir.

MCCONNELL: Thank you.

WALLACE: Up next, we'll hear from the number two Democrat in the Senate, Dick Durbin.

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